8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
May 8, 2008

Wellman, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-10033
(Commission File Number) 04-1671740
(IRS Employer Identification
No.)

1041 521 Corporate Center Drive
Fort Mill, South Carolina
(Address of principal executive offices) 29707
(Zip Code)

Registrant’s telephone number, including area code: (803) 835-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement.
	Item 2.02. —Results of Operations and Financial Condition.
	Item 7.01. Regulation FD Disclosure.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Ex-99.1 Press Release dated May 9, 2008
Ex-99.2 Wellman, Inc.'s Unaudited Monthly Operating Statements for the month ended February 29, 2008
Ex-99.3 Wellman, Inc.'s Unaudited Monthly Operating Statements for the month ended March 31, 2008

Item 1.01 — Entry into a Material Definitive Agreement.

     On May 8, 2008, Wellman Inc. (the “Company”) entered into a letter agreement amending its senior secured superpriority debtor in possession credit agreement dated February 26, 2008 (the “Credit Agreement”) among the Company and certain of its domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and the lenders that from time to time become party thereto. Under Section 9.1(i)(xvi) of the Credit Agreement as originally entered into, it would have been an event of default if the U.S. Bankruptcy Court (as defined below) did not enter an order in form and substance satisfactory to the administrative agent and the lenders, on or before May 22, 2008 (the “Order Deadline”), (A) approving bidding procedures, (B) scheduling a bidding deadline, auction date and sale hearing date, and (C) establishing procedures under Section 363 and 365 of the United States bankruptcy code for the sale of the Company. The letter agreement amended the Credit Agreement so that the Order Deadline is May 29, 2008. The letter agreement does not amend the other events of default. For a description of the Credit Agreement and a copy thereof please see the Company’s Current Report on Form 8-K dated February 26, 2008 filed with the Securities and Exchange Commission on March 4, 2008. A copy of the related press release is attached hereto as Exhibit 99.1.

Item 2.02. — Results of Operations and Financial Condition.

     The information set forth in Item 7.01 below is incorporated by reference in this Item 2.02 as if fully set forth herein.

Item 7.01. Regulation FD Disclosure.

     On May 12, 2008, the Company and certain of its subsidiaries (collectively, the “Debtors”) filed their unaudited consolidated Monthly Operating Statements for the months ended February 29, 2008 and March 31, 2008 (the “Monthly Operating Statements”), with the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court”) in the matter of In re Wellman, Inc., et al., Case No. 08-10595 (SMB). Exhibits 99.2 and 99.3 to this Current Report on Form 8-K contain the unaudited consolidated Monthly Operating Statements as filed with the United States Bankruptcy Court.

     The Monthly Operating Statements are limited in scope, cover a limited time period, and have been prepared solely for the purpose of complying with the monthly reporting requirements of the U.S. Bankruptcy Court. The financial information in the Monthly Operating Statements is in a format required by the U.S. Bankruptcy Court and the Company’s Debtor-in-Possession credit agreement, is preliminary and unaudited and does not purport to show the financial statements of any of the Debtors in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Therefore, the Monthly Operating Statements may exclude items required by GAAP,

such as certain reclassifications, eliminations, accruals, valuations and disclosure items. The Company cautions readers not to place undue reliance upon the Monthly Operating Statements. There can be no assurance that such information is complete and the Monthly Operating Statements may be subject to revision. The Monthly Operating Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

     These Monthly Operating Statements have been derived from the books and records of the Company. They, however, have not been subjected to procedures that would typically be applied to financial information presented in accordance with GAAP and, upon the application of such procedures, the Company believes that they could be subject to changes, and these changes could be material. The information furnished in the Monthly Operating Statements includes certain normal recurring adjustments but may not include all of the adjustments that would typically be made for quarterly financial statements in accordance with GAAP. In addition, certain information and footnotes disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

     Access to documents filed with the U.S. Bankruptcy Court and other general information about the Chapter 11 cases is available at www.kccllc.net/wellman. The content of the foregoing website is not a part of this Report.

Limitation on Incorporation by Reference

     The Monthly Operating Statements are being furnished for information purposes only and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”). Registration statements or other documents filed with the SEC shall not incorporate the Monthly Operating Statements or any other information set forth in this Report by reference, except as otherwise expressly stated in such filing. This Report will not be deemed an admission to the materiality of any information that is required to be disclosed solely by Regulation FD.

Forward-Looking Statements

     In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “believe,” “intend”, “expect,” “anticipate,” “plan,” “may,” “will,” and similar expressions are intended to identify forward-looking statements. Such statements include, among others, those concerning the Company’s expected financial performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These Statements are made as of the date of this Report based upon current expectations, and we undertake no obligation to update this

2

information, whether as a result of new information, future developments or otherwise. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock.

Item 9.01. Financial Statements and Exhibits.

     (a) Not applicable.

     (b) Not applicable.

     (c) Exhibits

99.1	Press Release dated May 9, 2008.
99.2	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended February 29, 2008.
99.3	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended March 31, 2008.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Wellman, Inc.
May 12, 2008	/s/ David R. Styka
	David R. Styka
	Vice President, Chief Accounting Officer and Controller

4

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated May 9, 2008.
99.2	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended February 29, 2008.
99.3	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended March 31, 2008.

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EX-99.1

Exhibit 99.1

Contact: Michael Bermish

Investor Relations Officer

(803) 835-2238

FOR IMMEDIATE RELEASE

WELLMAN, INC. RECEIVES EXTENSION
FOR APPROVAL OF BIDDING PROCEDURES

Fort Mill, SC., May 9, 2008 — Wellman, Inc. ([OTC]: WMAN.OB) today announced that it has received a one week extension of time to have bidding procedures approved by the Bankruptcy Court from the lenders providing its Debtor in Possession (“DIP”) Financing. The Company, in consultation with its stakeholders, is evaluating offers and restructuring alternatives, including a plan of reorganization, in an effort to maximize the value of Wellman’s business on a going concern basis. In order to allow us to maximize value for all of our stakeholders, the DIP lenders have agreed to provide us additional time to continue discussions with interested parties. This does not extend the deadline to complete the sale.

Forward-Looking Statements

Statements contained in this release that are not historical facts, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date hereof based upon current expectations, and we undertake no obligation to update this information. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the actions of our competitors; the financial condition of our customers; availability of financing, changes in financial markets, interest rates, credit ratings, changes in tax risks; inability to execute our strategy; environmental risks and foreign currency exchange rates; natural disasters, regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2007.

EX-99.2

Exhibit 99.2

Wellman, Inc.
Debtor-in-Possession
Analysis of Financial Statements for DIP Compliance
February 2008

Wellman, Inc. (the “Company”) filed for bankruptcy protection under the provisions of Chapter 11 on February 22, 2008. The results presented here represent the full month of February 2008 (pre-petition and post-petition).

Consolidated Statement of Operations

The $5.1 million decrease in gross profit (from $2.7 million in January to ($2.4) million in February) is mainly attributable to the change in raw material prices in the chemical-based segment. Current Raw Material Margin, which is the difference between the current months selling price and purchase price, was consistent in January and February. Our financial results in February were negatively impacted by the FIFO method of accounting for inventory, which resulted in $4.4 million of higher raw material costs from prior months being charged against current month’s selling prices. Additionally, in the recycled-based segment gross profit was also lower due to increased freight and added costs. Selling general and administrative expenses increased $1.1 million due to increased legal and professional fees associated with the potential sale of the Company as well as increased legal costs of operating in bankruptcy. As a result of the above items the operating loss for February increased to $6.4 from $0.4 in January. Interest expense decreased to $3.0 in February since starting on February 22, 2008 interest expense is only calculated on the amount borrowed in the DIP financing. Finally, $5.9 million of reorganization costs were incurred in February in connection with the Chapter 11 filing and the costs associated with terminating the Company’s financial instruments. As a result, the Company recorded a net loss of $15.3 million for February 2008. As indicated above the Company incurred $7 million in costs attributable to the reorganization, sales effort and bankruptcy. The year-to-date operating loss in 2008 is $6.8 million which is an improvement compared to the $7.4 million reported for the same period last year.

Consolidated Balance Sheet

The balance sheet at February 29, 2008, reflects $125.5 in borrowings under the DIP facility. Accounts receivable decreased by $1.8 compared to the January 31 balance and inventory levels decreased by $12.1 million, mainly attributable to lower raw material inventory levels in the chemical-based business ($8 million).

Consolidated Statement of Cash Flows

The Company borrowed $14.5 million in February and used it for the following purposes:

• To fund the $7 million in additional cash costs noted above,

• To pay $3.9 million of financing fees associated with the DIP financing,

• As a result of the operational loss we incurred in February, net of changes in working capital, and

• To increase the Company’s cash balance by $2.6 million primarily as a result of new banking requirements.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	February			January
	2008			2008
Net Sales	$	75.5		$	78.0
Cost of Sales		77.8			75.3
Gross Profit (Loss)		(2.4	)		2.7
Selling, General and Administrative Expenses		4.0			3.1
Other (Income) Loss		0.1			0.0
Operating Income (Loss)		(6.4	)		(0.4	)
Interest Expense, Net**		3.0			4.7
Earnings (Loss) from Continuing Operations
Before Restructuring Items and Income Taxes		(9.4	)		(5.0	)
Reorganization Items, Net		5.9			0.0
Earnings (Loss) from Continuing Operations
Before Income Taxes		(15.3	)		(5.0	)
Income Tax Expense (Benefit)		0.0			0.0
Earnings (Loss) from Continuing Operations		(15.3	)		(5.0	)
Earnings (Loss) from Discontinued Operations,
Net of Tax		0.0			0.0
Net Earnings (Loss)		($15.3	)		($5.0	)

** — Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the first and second lien debt, per the debt agreements, subsequent to Feb 22, 2008 was $775,147 and is not included in these financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	For the Month Ended						For the Year-to-Date
	February						Period Ended February
	2008			2007			2008			2007
Net Sales	$	75.5		$	128.1		$	153.4		$	218.7
Cost of Sales		77.8			127.8			153.1			218.2
Gross Profit (Loss)		(2.4	)		0.3			0.3			0.5
Selling, General and Administrative Expenses		4.0			4.4			7.0			8.0
Other (Income) Loss		0.1			(0.0	)		0.1			(0.0	)
Operating Income (Loss)		(6.4	)		(4.1	)		(6.8	)		(7.4	)
Interest Expense, Net**		3.0			4.9			7.7			10.4
Earnings (Loss) from Continuing Operations
Before Restructuring Items and Income Taxes		(9.4	)		(9.1	)		(14.4	)		(17.8	)
Reorganization Items, Net		5.9			0.0			5.9			0.0
Earnings (Loss) from Continuing Operations
Before Income Taxes		(15.3	)		(9.1	)		(20.3	)		(17.8	)
Income Tax Expense (Benefit)		0.0			0.0			0.0			0.0
Earnings (Loss) from Continuing Operations		(15.3	)		(9.1	)		(20.3	)		(17.8	)
Earnings (Loss) from Discontinued Operations,
Net of Tax		0.0			(0.3	)		0.0			(0.3	)
Net Earnings (Loss)		($15.3	)		($9.4	)		($20.3	)		($18.1	)

** — Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the first and second lien debt, per the debt agreements, subsequent to Feb 22, 2008 was $775,147 and is not included in these financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	February 29,			January 31,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	3.1		$	0.5
Accounts receivable		130.7			132.5
Inventories		91.1			103.2
Prepaid expenses and other current assets		28.1			25.6
Current assets held for sale		—			—
Total current assets		253.1			261.8
Property, plant and equipment:
Land, buildings and improvements		90.5			90.5
Machinery and equipment		336.8			336.7
CIP		6.0			5.8
		433.2			433.0
Less accumulated depreciation		192.8			191.8
Net property, plant and equipment		240.4			241.2
Other assets		7.9			9.1
Noncurrent assets held for sale		—			0
Total Assets	$	501.3		$	512.1
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade*	$	76.9		$	77.3
Accrued liabilities*		15.8			25.6
Debtor in possession credit agreement		125.5			—
Other debt		—			559.2
Current liabilities associated with assets held for sale		—			—
Total current liabilities		218.2			662.1
First and Second Lien Debt*		448.3
Long-term debt		—			—
Deferred income taxes and other noncurrent liabilities		39.2			40.5
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		705.7			702.6
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			184.8
Paid-in capital		248.8			248.7
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			(1.4	)
Accumulated deficit		(594.3	)		(578.1	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(204.4	)		(190.6	)
	$	501.3		$	512.1

* Includes liabilities subject to compromise which will be separately stated at quarter end.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	February 29,			February 28,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	3.1		$	1.5
Accounts receivable		130.7			153.3
Inventories		91.1			98.7
Prepaid expenses and other current assets		28.1			33.5
Current assets held for sale		—			56.1
Total current assets		253.1			343.1
Property, plant and equipment:
Land, buildings and improvements		90.5			85.0
Machinery and equipment		336.8			949.7
CIP		6.0			9.6
		433.2			1,044.3
Less accumulated depreciation		192.8			493.5
Net property, plant and equipment		240.4			550.8
Other assets		7.9			30.4
Noncurrent assets held for sale		—			31.7
Total Assets	$	501.3		$	956.0
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade*	$	76.9		$	79.1
Accrued liabilities*		15.8			22.4
Debtor in possession credit agreement		125.5			—
Other debt		—			0.3
Current liabilities associated with assets held for sale		—			21.7
Total current liabilities		218.2			123.5
First and Second Lien Debt*		448.3
Long-term debt		—			579.9
Deferred income taxes and other noncurrent liabilities		39.2			50.0
Noncurrent liabilities associated with assets held for sale		—			13.1
Total Liabilities		705.7			766.5
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			170.2
Paid-in capital		248.8			248.3
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			28.4
Accumulated deficit		(594.3	)		(212.8	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(204.4	)		189.5
	$	501.3		$	956.0

* Includes liabilities subject to compromise which will be separately stated at quarter end.

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	February			January
	2008			2008
Cash flow from operating activities:
Net earnings (loss)		($15.3	)		($5.0	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0
Depreciation		1.0			1.1
Amortization		1.4			1.4
Amortization in interest expense		0.1			0.1
Deferred taxes on income		0.0			0.0
Reorganization Items		5.9			0.0
Payment of reorganization items		(5.9	)		0.0
Changes in assets and liabilities:
Accounts receivable		1.8			(3.5	)
Inventories		12.1			(6.2	)
Prepaid expenses and other current assets		1.4			(0.6	)
Other assets		(0.0	)		(0.0	)
Accounts payable and accrued liabilities		(10.2	)		10.0
Other liabilities		(0.0	)		(1.1	)
Other		0.0			0.0
Net cash provided (used) by operating activities		(7.8	)		(3.8	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.2	)		(0.5	)
Net cash used by investing activities		(0.2	)		(0.5	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		14.5			4.8
Dividends paid on common stock		0.0			0.0
Debt and equity issuance costs		(3.9	)		0.0
Net cash provided (used) by financing activities		10.6			4.8
Discontinued Operations:
Operating activities		0.0			0.0
Investing activities		0.0			0.0
Financing activities		0.0			0.0
Net cash provided (used) by discontinued operations		0.0			0.0
Increase (decrease) in cash and cash equivalents		2.6			0.5
Cash and cash equivalents at beginning of period		0.5			0.0
Cash and cash equivalents at end of period	$	3.1		$	0.5

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
February Fiscal Period
(in millions)

	For the Month						For the YTD Period
	Ended February						Ended February
	2008			2007			2008			2007
Cash flow from operating activities:
Net earnings (loss)		($15.3	)		($9.4	)		($20.3	)		($18.1	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.3			0.0			0.3
Depreciation		1.0			4.0			2.1			7.2
Amortization		1.4			1.2			2.9			2.6
Amortization in interest expense		0.1			0.4			0.1			0.7
Deferred taxes on income		0.0			(0.1	)		0.0			(0.0	)
Reorganization Items		5.9			0.0			5.9			0.0
Payment of reorganization items		(5.9	)		0.0			(5.9	)		0.0
Changes in assets and liabilities:
Accounts receivable		1.8			13.6			(1.7	)		8.1
Inventories		12.1			14.0			5.8			15.6
Prepaid expenses and other current assets		1.4			0.7			0.7			1.1
Other assets		(0.0	)		(0.0	)		(0.0	)		0.2
Accounts payable and accrued liabilities		(10.2	)		10.0			(0.2	)		(12.4	)
Other liabilities		(0.0	)		(0.0	)		(1.1	)		(0.8	)
Other		0.0			(3.2	)		0.0			(4.7	)
Net cash provided (used) by operating activities		(7.8	)		31.3			(11.6	)		(0.1	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.2	)		(0.7	)		(0.7	)		(0.9	)
Net cash used by investing activities		(0.2	)		(0.7	)		(0.7	)		(0.9	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		14.5			(28.3	)		19.3			2.8
Dividends paid on common stock		0.0			0.0			0.0			0.0
Debt and equity issuance costs		(3.9	)		0.0			(3.9	)		0.0
Net cash provided (used) by financing activities		10.6			(28.3	)		15.4			2.8
Discontinued Operations:
Operating activities		0.0			(0.2	)		0.0			0.3
Investing activities		0.0			(0.0	)		0.0			(0.2	)
Financing activities		0.0			(1.3	)		0.0			(0.4	)
Net cash provided (used) by discontinued operations		0.0			(1.5	)		0.0			(0.3	)
Increase (decrease) in cash and cash equivalents		2.6			0.8			3.1			1.5
Cash and cash equivalents at beginning of period		0.5			0.7			0.0			0.0
Cash and cash equivalents at end of period	$	3.1		$	1.5		$	3.1		$	1.5

In re Wellman, Inc., et al.
Case No. 08-10595 (SMB)
Reporting Period: February 23 — February 29, 2008
Cash Disbursements by Petitioning Entity

			February 23 — February 29,
Petitioning Entities	Case Number:		2008
Wellman, Inc.		081-08-10595	$	20,827,133
Fiber Industries, Inc.		081-08-10607		—
Wellman of Mississippi, Inc.		081-08-10605		—
PTA Resources LLC		081-08-10596		—
Prince, Inc.		081-08-10604		—
ALG, Inc.		081-08-10599		—
Wellman Fibres Ltd.		081-08-10598		—
MRF, Inc.		081-08-10600		—
Warehouse Associates Inc.		081-08-10601		—
MED Resins, Inc.		081-08-10602		—
Carpet Recycling of Georgia Inc.		081-08-10603		—
Josdav, Inc.		081-08-10606		—
			$	20,827,133

EX-99.3

Exhibit 99.3

Wellman, Inc.
Debtor-in-Possession
Analysis of Financial Statements for DIP Compliance
March 2008

An analysis of the March 2008 operating results of Wellman, Inc. (the “Company”) are presented below. Wellman, Inc. and certain subsidiaries filed for bankruptcy protection under the provisions of Chapter 11 on February 22, 2008. References to February results represent the full month of February (pre-petition and post-petition).

Consolidated Statement of Operations

The $6.3 million increase in gross profit (from ($2.3) million in February to $4.0 million in March) is attributable to increases in the chemical based segment ($5.3 million) as well as the recycled based segment ($1.0 million). The increase in the chemical based segment is mainly attributable to increased raw material margins due to the change in raw material prices and increased PET resin sales volume (12 million pounds). Raw material margin, which is the difference between selling prices and raw material costs, increased $4.6 million in March primarily because selling prices remained stable while raw material costs decreased. The recycled-based segment gross profit increase was due to improved raw material margins attributable to improved selling prices and lower raw material cost. Selling, general and administrative expenses decreased $1.3 million primarily due to lower legal and professional fees. As a result of the above items, $1.3 million of operating income was realized in March compared to an operating loss of $6.4 in February. Interest expense decreased to $0.9 in March reflecting a full month of interest expense only being calculated on the amount borrowed in the DIP financing. Finally, $2.8 million of reorganization costs were incurred in March in connection with the Chapter 11 filing. As a result, the Company recorded a net loss of $2.4 million for March 2008.

Consolidated Balance Sheet

The balance sheet at March 31, 2008, reflects $124.9 in borrowings under the DIP facility and $1.3 in cash and cash equivalents. The total borrowed plus cash on hand is a slight decrease from the amount borrowed in February. Accounts receivable increased by $4.6 million due to higher sales and inventory levels decreased by $5.9 million, mainly attributable to lower finished goods inventory levels in the chemical-based business.

Consolidated Statement of Cash Flows

• The Company repaid $0.6 million of debt in March with cash provided from operations. In addition the company funded $2.8 million in reorganization costs as well.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	March			February**
	2008			2008
Net Sales	$	86.6		$	75.5
Cost of Sales		82.6			77.8
Gross Profit (Loss)		4.0			(2.3	)
Selling, General and Administrative Expenses		2.7			4.0
Other (Income) Loss		0.0			0.1
Operating Income (Loss)		1.3			(6.4	)
Interest Expense, Net*		0.9			5.5
Earnings (Loss) from Continuing Operations
Before Reorganization Items and Income Taxes		0.4			(11.9	)
Reorganization Items, Net		2.8			3.4
Earnings (Loss) from Continuing Operations
Before Income Taxes		(2.4	)		(15.3	)
Income Tax Expense (Benefit)		0.0			0.0
Earnings (Loss) from Continuing Operations		(2.4	)		(15.3	)
Earnings (Loss) from Discontinued Operations,
Net of Tax		0.0			0.0
Net Earnings (Loss)		($2.4	)		($15.3	)

*	—	Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the first and second lien debt, per the debt agreements, was $775,147 for Feb 22-29 and $3,432,794 for March. Amounts are not included in the financial statements.
**	—	February has been restated for reclassification of loss on termination of swaps.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	For the Month Ended						For the Year-to-Date
	March						Period Ended March
	2008			2007			2008			2007
Net Sales	$	86.6		$	100.5		$	240.0		$	319.2
Cost of Sales		82.6			97.9			235.7			316.1
Gross Profit (Loss)		4.0			2.6			4.3			3.1
Selling, General and Administrative Expenses		2.7			3.8			9.6			11.8
Other (Income) Loss		0.0			0.3			0.1			0.3
Operating Income (Loss)		1.3			(1.5	)		(5.4	)		(8.9	)
Interest Expense, Net*		0.9			4.7			11.1			15.1
Earnings (Loss) from Continuing Operations
Before Reorganization Items and Income Taxes		0.4			(6.2	)		(16.5	)		(24.0	)
Reorganization Items, Net		2.8			0.0			6.2			0.0
Earnings (Loss) from Continuing Operations
Before Income Taxes		(2.4	)		(6.2	)		(22.7	)		(24.0	)
Income Tax Expense (Benefit)		0.0			0.0			0.0			(0.1	)
Earnings (Loss) from Continuing Operations		(2.4	)		(6.2	)		(22.7	)		(24.0	)
Earnings (Loss) from Discontinued Operations,
Net of Tax		0.0			(0.0	)		0.0			(0.3	)
Net Earnings (Loss)		($2.4	)		($6.2	)		($22.7	)		($24.3	)

*  —    Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the first and second lien debt, per the debt agreements, was $3,432,794 for the month of March and $4,207,941 year-to-date after Feb 22, 2008. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	March 31,			February 29,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	1.3		$	3.1
Accounts receivable		135.3			130.7
Inventories		85.2			91.1
Prepaid expenses and other current assets		25.4			28.1
Current assets held for sale		—			—
Total current assets		247.2			253.1
Property, plant and equipment:
Land, buildings and improvements		90.5			90.5
Machinery and equipment		336.9			336.8
CIP		6.3			6.0
		433.7			433.2
Less accumulated depreciation		193.9			192.8
Net property, plant and equipment		239.8			240.4
Other assets		10.7			7.9
Noncurrent assets held for sale		—			0
Total Assets	$	497.7		$	501.3
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade*	$	71.0		$	76.9
Accrued liabilities*		21.3			15.8
Debtor in possession credit agreement		124.9			125.5
Other debt		—			—
Current liabilities associated with assets held for sale		—			—
Total current liabilities		217.2			218.2
First and Second Lien Debt*		448.3			448.3
Long-term debt		—			—
Deferred income taxes and other noncurrent liabilities		39.3			39.2
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		704.7			705.7
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			185.7
Paid-in capital		248.5			248.8
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			—
Accumulated deficit		(596.7	)		(594.3	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(207.1	)		(204.4	)
	$	497.7		$	501.3

* Includes liabilities subject to compromise which will be separately stated in our Form 10-Q.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	March 31,			March 31,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	1.3		$	—
Accounts receivable		135.3			169.5
Inventories		85.2			100.3
Prepaid expenses and other current assets		25.4			33.5
Current assets held for sale		—			58.2
Total current assets		247.2			361.5
Property, plant and equipment:
Land, buildings and improvements		90.5			83.8
Machinery and equipment		336.9			950.7
CIP		6.3			10.1
		433.7			1,044.7
Less accumulated depreciation		193.9			496.8
Net property, plant and equipment		239.8			547.9
Other assets		10.7			52.8
Noncurrent assets held for sale		—			31.4
Total Assets	$	497.7		$	993.6
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade*	$	71.0		$	91.3
Accrued liabilities*		21.3			28.6
Debtor in possession credit agreement		124.9			—
Other debt		—			0.3
Current liabilities associated with assets held for sale		—			25.6
Total current liabilities		217.2			145.8
Liabilities subject to compromise		448.3
Long-term debt		—			580.5
Deferred income taxes and other noncurrent liabilities		39.3			74.0
Noncurrent liabilities associated with assets held for sale		—			12.0
Total Liabilities		704.7			812.3
Stockholders’ Deficit:
Common stock		—			0.0
Preferred stock		185.7			171.6
Paid-in capital		248.5			247.3
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			28.6
Accumulated deficit		(596.7	)		(221.6	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(207.1	)		181.3
	$	497.7		$	993.6

* Includes liabilities subject to compromise which will be separately stated in our Form 10-Q.

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	March			February
	2008			2008
Cash flow from operating activities:
Net earnings (loss)		($2.4	)		($15.3	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0
Depreciation		1.0			1.0
Amortization		1.4			1.4
Amortization in interest expense		0.0			0.1
Deferred taxes on income		0.0			0.0
Reorganization Items		2.8			3.4
Payment of reorganization items		(2.8	)		(3.4	)
Changes in assets and liabilities:
Accounts receivable		(4.7	)		1.8
Inventories		6.0			12.0
Prepaid expenses and other current assets		(1.1	)		1.4
Other assets		(0.2	)		0.0
Accounts payable and accrued liabilities		(0.5	)		(10.2	)
Other liabilities		(0.3	)		0.0
Other		0.0			0.0
Net cash provided (used) by operating activities		(0.8	)		(7.8	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.4	)		(0.2	)
Net cash used by investing activities		(0.4	)		(0.2	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		(0.6	)		14.5
Dividends paid on common stock		0.0			0.0
Debt and equity issuance costs		0.0			(3.9	)
Net cash provided (used) by financing activities		(0.6	)		10.6
Discontinued Operations:
Operating activities		0.0			0.0
Investing activities		0.0			0.0
Financing activities		0.0			0.0
Net cash provided (used) by discontinued operations		0.0			0.0
Increase (decrease) in cash and cash equivalents		(1.8	)		2.6
Cash and cash equivalents at beginning of period		3.1			0.5
Cash and cash equivalents at end of period	$	1.3		$	3.1

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
March Fiscal Period
(in millions)

	For the Month						For the YTD Period
	Ended March						Ended March
	2008			2007			2008			2007
Cash flow from operating activities:
Net earnings (loss)		($2.4	)		($6.2	)		($22.7	)		($24.3	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0			0.0			0.3
Depreciation		1.0			4.5			3.2			11.7
Amortization		1.4			1.4			4.3			4.1
Amortization in interest expense		0.0			0.1			0.1			0.9
Deferred taxes on income		0.0			(0.1	)		0.0			(0.1	)
Johnsonville fibers disposal costs		0.0			(1.0	)		0.0			(1.0	)
Payments made against Jville fiber disposal costs		0.0			(2.2	)		0.0			(2.2	)
Reorganization Items		2.8			0.0			6.1			0.0
Payment of reorganization items		(2.8	)		0.0			(6.1	)		0.0
Actuarial gain		0.0			0.0			0.0			0.0
Changes in assets and liabilities:
Accounts receivable		(4.7	)		(16.3	)		(6.3	)		(8.2	)
Inventories		6.0			(0.8	)		11.8			14.7
Prepaid expenses and other current assets		(1.1	)		(0.8	)		(0.4	)		0.3
Other assets		(0.2	)		(0.2	)		(0.3	)		0.0
Accounts payable and accrued liabilities		(0.5	)		21.4			(0.7	)		9.1
Other liabilities		(0.3	)		(0.2	)		(1.4	)		(1.0	)
Other		(0.0	)		3.1			0.0			(1.8	)
Net cash provided (used) by operating activities		(0.8	)		2.7			(12.4	)		2.5
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.4	)		(1.5	)		(1.1	)		(2.3	)
Net cash used by investing activities		(0.4	)		(1.5	)		(1.1	)		(2.3	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		(0.6	)		1.1			18.7			3.9
Dividends paid on common stock		0.0			(0.7	)		0.0			(0.7	)
Debt and equity issuance costs		0.0			0.0			(3.9	)		0.0
Net cash provided (used) by financing activities		(0.6	)		0.4			14.8			3.2
Discontinued Operations:
Operating activities		0.0			(1.3	)		0.0			(1.1	)
Investing activities		0.0			(0.4	)		0.0			(0.5	)
Financing activities		0.0			(1.4	)		0.0			(1.8	)
Net cash provided (used) by discontinued operations		0.0			(3.1	)		0.0			(3.4	)
Increase (decrease) in cash and cash equivalents		(1.8	)		(1.5	)		1.3			0.0
Cash and cash equivalents at beginning of period		3.1			1.5			0.0			0.0
Cash and cash equivalents at end of period	$	1.3		$	0.0		$	1.3		$	0.0

Wellman, Inc.
EBITDAR, as defined

     We have provided a non-GAAP measure, “EBITDAR, as defined,” because our DIP Credit Agreement uses this measurement as a key component. In accordance with our DIP Credit Agreement, we must maintain a minimum cumulative EBITDAR (cumulative monthly commencing March 1, 2008, and rolling into trailing twelve months) tested as of the last day of the applicable month, with a report due on the fifteenth day after the end of each month, commencing with the first full month following the Petition Date. We believe it is also an important measurement tool for (1) financial institutions that provide us with capital; (2) investors; and (3) our Board and management. In each instance, we used EBITDAR, as defined because it excluded items that are not expected to impact the long- term cash flow of the businesses and are not an indication of our ongoing operating performance. In addition, EBITDAR, as defined is a measure frequently used to value an enterprise and to enable investors to analyze the efficiency of our operations and to compare and/or rank use with other companies of differing capital structures. Our Board of Directors, CEO (our chief operating decision maker), and our senior management use EBITDAR, as defined to evaluate the operating performance of our segments and determine incentive compensation for employees throughout the organization. EBITDAR, as defined, under the DIP Credit Agreement is calculated by adding Earnings (loss) from continuing operations, income tax expense (benefit), interest expense, non-cash charges and non-recurring fees, cash charges, and other cash expenses made or incurred in connection with entering into the DIP Credit Agreement.

     The following table reconciles Loss from continuing operations to EBITDAR, as defined for each month and the three months ending March 31, 2008.

										Year-to-
	January			February			March			Date
	2008			2008			2008			March 2008
Loss from Continuing Operations	$	(5,038	)	$	(15,276	)	$	(2,388	)	$	(22,701	)
Income Tax Expense (Benefit)		—			—			—			—
Interest Expense, Net		4,675			5,505			925			11,105
Depreciation & Amortization		2,530			2,441			2,493			7,464
Permitted Adjustments:
Reorganization Items		—			3,349			2,798			6,147
Inventory Reserves		310			802			27			1,139
Uncollectible Accounts		144			—			65			209
Total permitted adjustments		454			4,151			2,890			7,495
EBITDAR, as defined	$	2,621		$	(3,179	)	$	3,921		$	3,363

     Despite the importance of EBITDAR, as defined, we recognize that this non-GAAP financial measure does not replace the presentation of our GAAP financial results and are not intended to represent cash flows or an alternative to net earnings (loss). The EBITDAR, as defined inforamtion we provide is simply supplemental information and an additional measurement tool to assist our management and certain investors in analyzing our performance.

In re Wellman, Inc., et al.
Case No. 08-10595 (SMB)
Reporting Period: March 1 — March 31, 2008
Cash Disbursements by Petitioning Entity

			March 1 — March 31,
Petitioning Entities	Case Number:		2008
Wellman, Inc.		081-08-10595	$	82,460,233
Fiber Industries, Inc.		081-08-10607		—
Wellman of Mississippi, Inc.		081-08-10605		—
PTA Resources LLC		081-08-10596		—
Prince, Inc.		081-08-10604		—
ALG, Inc.		081-08-10599		—
Wellman Fibres Ltd.		081-08-10598		—
MRF, Inc.		081-08-10600		—
Warehouse Associates Inc.		081-08-10601		—
MED Resins, Inc.		081-08-10602		—
Carpet Recycling of Georgia Inc.		081-08-10603		—
Josdav, Inc.		081-08-10606		—
			$	82,460,233